Correlation Between Treasury Wine and AENA SME
Can any of the company-specific risk be diversified away by investing in both Treasury Wine and AENA SME at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Treasury Wine and AENA SME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treasury Wine Estates and AENA SME UNSPADR110, you can compare the effects of market volatilities on Treasury Wine and AENA SME and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Treasury Wine with a short position of AENA SME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treasury Wine and AENA SME.
Diversification Opportunities for Treasury Wine and AENA SME
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Treasury and AENA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Treasury Wine Estates and AENA SME UNSPADR110 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AENA SME UNSPADR110 and Treasury Wine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Treasury Wine Estates are associated (or correlated) with AENA SME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AENA SME UNSPADR110 has no effect on the direction of Treasury Wine i.e., Treasury Wine and AENA SME go up and down completely randomly.
Pair Corralation between Treasury Wine and AENA SME
Assuming the 90 days horizon Treasury Wine is expected to generate 1.92 times less return on investment than AENA SME. In addition to that, Treasury Wine is 1.26 times more volatile than AENA SME UNSPADR110. It trades about 0.04 of its total potential returns per unit of risk. AENA SME UNSPADR110 is currently generating about 0.09 per unit of volatility. If you would invest 1,475 in AENA SME UNSPADR110 on September 5, 2024 and sell it today you would earn a total of 545.00 from holding AENA SME UNSPADR110 or generate 36.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treasury Wine Estates vs. AENA SME UNSPADR110
Performance |
| Timeline |
| Treasury Wine Estates |
| AENA SME UNSPADR110 |
Treasury Wine and AENA SME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treasury Wine and AENA SME
The main advantage of trading using opposite Treasury Wine and AENA SME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treasury Wine position performs unexpectedly, AENA SME can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AENA SME will offset losses from the drop in AENA SME's long position.| Treasury Wine vs. Vishay Intertechnology | Treasury Wine vs. Ultra Clean Holdings | Treasury Wine vs. Transport International Holdings | Treasury Wine vs. Casio Computer CoLtd |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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